Tourism drives Napa Valley economy amid growing pains

Napa Mayor Jill Techel says a "culture of collaboration" is behind the renaissance of the city's economy at North Bay Business Journal's Impact Napa conference held at The Meritage Resort & Spa on Aug. 5, 2016. (JEFF QUACKENBUSH / NORTH BAY BUSINESS JOURNAL)
August 5, 2016

CYNTHIA SWEENEY,

NORTH BAY BUSINESS JOURNAL

With tourism now driving the economy, the question before Napa Valley is how to preserve its soul, the rural character that has made it a booming visitor destination.

On the one side, city and county officials extol a robust economy and more jobs as a result of the climbing tourism numbers. On the other side, long-time residents are concerned about the quality of life, too many wineries, too much traffic, and maintaining the rural Napa character that increasingly draws people to the county without “loving it to death.”

Both sides made their case at Impact Napa, presented by the Business Journal at The Meritage Resort and Spa Friday.

The event also featured a conversation with Warren Winiarski, owner of Acadia Vineyards, and founder of Stag’s Leap Wine Cellars. Winiarski also created the winning 1973 cabernet sauvignon at the “Judgment of Paris” tasting 40 years ago this year, which for the first time equaled Californa wines to those in France. He was interviewed by author and wine industry attorney Richard Mendelson, of Dickenson Peatman & Fogarty.

In 1985, there were 12 restaurants in Napa, and today there are more than 80, with more than 500 wineries, and 150 hotels.

Traveler spending in Napa has more than doubled since 1998, with more than 3 million visitors annually. In 2015, it saw the largest growth in visitor spending, an increase of almost 9 percent over the previous year, and the highest percentage gain of all of California’s 58 counties. Tourists spent $1.27 billion, with a total of $116 million in tax revenue, according to Visit Napa Valley.

In 2000, the transient occupancy tax brought $4.3 million into the city of Napa. In 2016 that number is on track to be $18 million.

A panel discussion at the event included David Graves, managing member, Saintsbury Winery, and Alfredo Pedroza, chairman of the Napa County Board of Supervisors, and Dan Mufson, president, Napa 2050.

Napa Vision 2050 is a group of 14 affiliates that was formed last year, whose mission is to protect and preserve the general welfare of the community and advocate responsible planning.

Both Mufson and Graves raised concerns that rapid growth in tourims has affected Napa’s water supply, and added traffic and housing woes. Mufson also noted that despite the economic growth, 43 percent of families in Napa live below the poverty level.

“We’re trying to gain control of what’s going on,” Mufson said in an earlier interview with the Business Journal.

What’s going on, he said, is the rubber stamping of new vineyard and winery projects without regard to the environment or the impact on people who live in Napa.

“They just keep approving projects. No one is ever turned down. It’s a cycle going around and around and we don’t see any leadership. It comes down to big business and big money. Corporations and wealthy people who don’t live here and want trophy vineyards,” Mufson said.

City and county officials say they are looking into traffic and housing issues. Napa Mayor Jill Techel said at the event the city has plans for traffic roundabouts and plans for more housing in the city.

“We deal with impacts as they happen,” she said. “Tourism is our economic development, a present given to us. This is a good economic model for a city that has all the bones to do it.”

Pedroza put it more bluntly, saying “The city is thriving with a healthy budget. Napa is going to change whether you like it or not. We can’t look in the rearview mirror and go back. There are issues that come with success, but you don’t shut off the success, you manage it.”

Visitor spending also supported 13,680 jobs in 2015, an increase of 3.7 percent from 2014.

Mufson acknowledges there has been an increase in jobs, but noted that hospitality jobs are largely minimum wage and workers can’t afford to live in Napa.

“There has also been tremendous boost from TOT but where does the money go? They aren’t building better roads. It gets lost in the general funds,” he said previously. Transient occupancy taxes, or TOT, helps fund collective marketing efforts.

Between 2010–2015, the population of Napa grew by 4 percent, while housing grew by 1.3 percent and prices skyrocketed 63 percent.

One thing the panel agreed upon was that housing will have to get denser. Mufson also suggested converting surplus county land to worker housing.

Mendelson said he is heartened to see younger generations building upon the legacy of previous generations, preserving the soul of the Valley, and the event concluded with words of wisdom from Winiarski, who can be considered one of the founding fathers of the Napa Valley wine industry.

“I hear passion and common background, and different articulations of the ultimate vision, but all love it (Napa Valley),” he said. “We need to keep talking together to find solutions to the problems before us, in the spirit of friendship for a common vison that looks to the soul and beauty of Napa Valley.”